Ondigital to keep free set top boxes

Set top boxes stay free, says the company

Embattled digital TV service Ondigital has denied press reports that it is set to charge for its set top boxes.

Amid concern over the profitability of the enterprise, shortly to be re-branded ITV Digital, there has been speculation that it would charge customers for the set top boxes which are currently given to subscribers on a free loan.

All of our financial projections are predicated on free set top boxes

Ondigital spokesman

An Ondigital spokesman told BBC New Online: "It's a bit of a non-story - the position is that we will continue to supply the vast majority of subscribers as now with a free loan of a set top box.

"But we will be introducing new set top boxes with new features - and those who want those features like hard discs and web browsers would be charged for those."

Both Ondigital and the current market leader BskyB currently give free set top boxes to attract subscribers.

But technological changes as well as financial pressures may call this policy into question.

A new generation of set top boxes may incorporate cameras, recording devices and internet facilities.

'Long term'

And when digital TVs are more common, a plug-in module will be sufficient to provide digital TV services - at around a quarter of the price.

"When we launched we expected to be a service delivered more through digital TVs than set top boxes - but that's a long term project," said the Ondigital spokesman.

The cost of subsidising the boxes has put great pressure on Ondigital owners Granada and Carlton Communications.

Subscriptions

In 1998 the company predicted it would cost £350m for the service to break even - but the venture has already cost £800m and the company admits it will have to find £1.1bn in investment before turning a profit in 2003.

Ondigital has already started to recover more of its costs by raising the price of its basic pre-paid annual subscription package from £99 to £119.

But Ondigital maintain that the company is on track.

"All of our financial projections - to break even in 2003-04 with 1.7 million subscribers - are predicated on free set top boxes", said the spokesman.

"Even when the second generation of set top boxes come in the vast majority will still get their digital TV through free set top boxes."